Cumin seed has seen one of the craziest bull runs in the history of agro-commodity trading. It has come a long way from a price of Rs 135/kg (1.67 USD/kg) in October 2021 to Rs 340/kg (4.15 USD/kg) in Jan 2023 whopping 250% price increase in a span of a mere 1 year.
In this post, we will try to make sense of why a sudden rise in the price of Cumin Seed and what to expect in the future.
Starting Point of Bull Run - November 2021
Cumin’s bull run picked up its pace after Diwali 2021 when the sowing report showed poor numbers and farmers from Gujarat and Rajasthan reported there might be damage to the crop’s growth as well. However, the bull run was slow-paced as it had a huge carry-over stock from the previous season to support the demand for the coming year.
Throughout the year Cumin saw really good demand in the International as well as domestic markets despite high prices giving high price support and even pushing it further.
Read our previous reports on Cumin Seed 1. Cumin Crop Report 2022
2. Cumin Seed Market Report, July 2022
3. Cumin Seed Price Outlook 15/08/2022
Cumin Seed Prices from Oct 7, 2022 to Jan 7, 2023
Farmers Switching to Other Crops
Cumin is a difficult crop to grow which requires a specific temperature. Farmers of cumin in Gujarat and Rajasthan are shifting to other crops. We think the following are the reasons why farmers are preferring other crops despite the high prices of Cumin.
Better availability of water via modern canals leads to farmers growing easy crops.
Better MSP for other crops like Mustard Seed, Brown chickpea, etc.
Unpredictable weather conditions due to global warming.
Overall it is estimated that cumin sowing is 90% as compared to the previous year. In the previous year, the sowing area was 70% more than the year before. On top of that, it is estimated that only 70% area will yield results as the onset of winter was late in Gujarat and Rajasthan.
Last year we even visited Cumin growing farmers.
Empty Carry Over Stock
It is estimated that only 200,000 bags are left for the carry-over stock until the upcoming season.
Strong Demand from Export
Even though prices are increasing every day the export demand continues to be strong, especially from Gulf and other Asian countries. Demand may be due to the upcoming Ramadan festivities.
We have not seen any correction and resistance at increasing price points which means the price trend is due to an actual supply-demand gap. We predict that the cumin price will touch 400rs/kg (4.9 USD/kg) until March 2023.
As Suman Exports sits at the heart of Unjha Mandi in Gujarat (Read why Unjha is one of most important Spices Mandi in world), which controls 90% of cumin from India and 75% from the world we can help you fetch better prices than the market.